Offshore Trusts Report: Liechtenstein

Legal Framework and Formation Rules and Fees

Liechtenstein is the only civil law jurisdiction which
has adopted largely anglo-saxon trust legislation (contained in
the PGR Code), although, unlike the common law trust, there is no
bar against accumulation of income, nor against perpetuities.

Liechtenstein is home to a thriving business in trust
management. Although other local corporate forms offer partial substitutes
for the trust, it remains a highly effective means of asset protection,
and non-anglo-saxon clients are often more comfortable with Liechtenstein
as a jurisdiction than they might be with, for instance, an ex-British
colony.

A Liechtenstein Trust is set up by a written agreement
(Trust Deed) between the trustor (settlor) and trustee(s), or by
a written Declaration of Trust by the trustor, matched by a written
Acceptance of Trust by the trustee. The legislation in fact does
not speak of 'trusts' but of 'trusteeship'.

The Trust Deed does not have to contain the names
of beneficiaries. If the Trust Deed is deposited with the Registrar
of Trusts, it will not be publicly available, and later instruments
(eg naming beneficiaries) will not have to be revealed; if the
Trust Deed is not deposited within 12 months, details of the trust
must be placed on the public register, comprising:

a description of the trust;

the date of formation;

the duration of the trust;

the name (or trade name) and address of the trustee.

A registration fee is payable on registration. A
trust under foreign law is a Liechtenstein Trust and subject to
local taxation. Liechtenstein Trusts are taxed annually on their
capital value at 0.075% if capital is between SFr 2m and 10m,
and 0.05% if capital is over SFr 10m (at the time of writing).
Payments to non-resident beneficiaries of a Trust are free of
withholding tax.

The trustor can make quite specific arrangements
in the Trust Deed covering the identification of beneficiaries,
and future procedures of various types; the trust property must
be separated from the trustor's other assets, and the trustee
can take action to enforce this against the trustor under contract
law. The Deed must not bind the trustee to the trustor's continuing
directions, or the trust will lapse into ordinary contract law.

Liechtenstein News

Liechtenstein, Malta Sign DTAFriday 4/10/2013Liechtenstein's Foreign Minister Aurelia Frick and her Maltese counterpart
George Vella have recently signed in New York a bilateral double taxation agreement
between the two countries in respect of taxes on income and on wealth.

Liechtenstein Congratulated On Successful Tax PolicyThursday 19/9/2013Standard and Poor's has maintained Liechtenstein's triple A rating,
alluding to a stable outlook and highlighting the fact that the Principality's
fiscal and financial policies have very much contributed to Liechtenstein's
reputation and strength as a safe, reliable, and attractive economic location.

Austria Eyes US FATCA DealFriday 10/5/2013Austrian Chancellor Werner Faymann has announced plans to enter into talks with
the US and with the Organization for Economic Cooperation and Development,
aimed at combating tax fraud and tax evasion.

Austria Willing To Negotiate With EU On Banking SecrecyWednesday 1/5/2013Austrian Chancellor Werner Faymann and Deputy Chancellor Michael Spindelegger
have recently confirmed Austria's willingness "to participate constructively"
in negotiations between the European Union and third states on an automatic
exchange of banking information.

LGT Headquarters Middle East Business In DubaiTuesday 19/2/2013LGT Group, the international private banking and asset management group, owned
by the royal family of Liechtenstein, has chosen Dubai as the headquarters of its new subsidiary, LGT (Middle East) Limited, following regulatory approvals to operate in the Dubai International Financial Center.

Austria To Agree Swiss-Style Tax Deal With LiechtensteinTuesday 15/1/2013During an upcoming working visit to Vienna, Liechtenstein’s Prime Minister
Klaus Tschütscher is due to hold talks with key ministers from the Austrian
chancellery and from the finance ministry, with the discussions focussing on the
"imminent conclusion" of a bilateral tax agreement between the two countries.

Liechtenstein, UK DTA In ForceWednesday 2/1/2013Following the exchange of relevant notifications, the agreement pertaining
to the avoidance of double taxation and tax evasion in the area of taxes on
income and on wealth between Great Britain and Northern Ireland and the Principality
of Liechtenstein has now entered into force.

The Offshore Trusts Guide Newsletter

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Wolters Kluwer (BSI) Limited has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.